Do I have to refinance to remove PMI?

Conventional: no — cancel at 78-80% LTV by request. FHA (post-2013): yes — must refi out of FHA to eliminate MIP.

Can I remove FHA MIP without refinancing?

Not on most post-2013 FHA loans. MIP lasts the life of the loan; must refi to a conventional or Non-QM product.

How do I prove current home value?

A licensed appraisal ordered or approved by the lender is standard evidence.

Can a business owner exit FHA into a bank statement loan?

Yes — a bank statement refi replaces the FHA loan and eliminates MIP. Requires 12-24 months of deposits.

What is PMI costing me per month?

Typically 0.3%–1.5% annually. On a $500,000 loan at 0.7%, roughly $292/month.

← Refinance

Drop PMI by refinancing once you reach 20% equity

Private mortgage insurance (PMI) cancels automatically at 78% LTV on conforming loans, but refinancing may eliminate it sooner if your home has appreciated. Business owners can do a rate-and-term refi using bank statement income to remove PMI and often lower their rate simultaneously.

By Sunrise Lending

PMI vs. MIP — the FHA difference

Conventional loans have PMI, which cancels at 78% LTV or can be removed at 80% LTV by request. FHA loans have MIP (mortgage insurance premium), which often lasts the life of the loan for files originated after June 2013. The only way to remove FHA MIP is to refinance out of the FHA loan into a conventional or Non-QM mortgage.

What you need to know

PMI cancels automatically at 78% LTV on conforming loans (Homeowners Protection Act)
Request PMI removal at 80% LTV — does not require a full refinance
Refinance eliminates PMI sooner if home has appreciated above 80% LTV
FHA MIP on post-2013 loans does not cancel — must refinance to remove
Bank statement refi available to self-employed borrowers needing to exit FHA
New appraisal typically required to document current LTV for refi-based PMI removal

When PMI cancels automatically

Under the Homeowners Protection Act, PMI must automatically cancel when a conforming loan's LTV reaches 78% based on the original amortization schedule — even if you don't request it. You can request cancellation at 80% LTV with proof of good payment history.

Using appreciation to remove PMI sooner

If your home has appreciated since purchase, a new appraisal may show a current LTV below 80% even if your amortization hasn't gotten there yet. A lender will accept a current appraisal for PMI removal in some cases without a full refinance. If you're also able to lower your rate or change your program at the same time, a full rate-and-term refi makes sense.

Exiting FHA mortgage insurance

FHA MIP on loans originated after June 2013 does not cancel regardless of LTV — it lasts the life of the loan (for most borrowers). The only removal path is refinancing out of FHA into a conventional or Non-QM mortgage. For a self-employed borrower who used FHA because they couldn't qualify conventionally, a bank statement refi provides the exit once sufficient equity and credit history are established.

A business owner who put 3.5% down on FHA 3 years ago and whose home has appreciated 20% is now sitting at roughly 75–78% LTV. A bank statement refi eliminates the MIP, potentially lowers the rate, and eliminates the constraint of FHA's loan limits.

The refinance cost vs. PMI savings math

PMI on a $500,000 loan at 0.5%–1.0% annual rate costs $2,500–$5,000/year. Closing costs on a $500,000 refi are typically $8,000–$15,000. A break-even of 2–4 years is typical. If you plan to stay in the home for longer than the break-even, the refi saves money.

Common questions

Do I have to refinance to remove PMI?: On conventional loans, no — you can request cancellation at 80% LTV or it cancels automatically at 78%. On FHA loans originated after June 2013, yes — you must refinance out of FHA to eliminate MIP. A new appraisal may establish current LTV without a full refi on conventional loans.
Can I remove FHA mortgage insurance without refinancing?: Not for most borrowers on FHA loans originated after June 2013. Those loans carry MIP for the life of the loan. The only removal path is refinancing into a conventional or Non-QM product. Earlier FHA loans had different rules.
How do I prove my home's current value to remove PMI?: A licensed appraisal ordered by or approved by the lender is the standard evidence. Automated valuation models (AVMs) are sometimes accepted for lower-LTV files. Your lender specifies what evidence they will accept.
Can a business owner exit FHA into a bank statement loan?: Yes — a bank statement refinance replaces the FHA loan with a Non-QM product, eliminating MIP. The bank statement income qualification requires 12–24 months of business deposits. Credit requirements vary by program.
What is PMI costing me per month?: PMI typically runs 0.3%–1.5% of the loan amount per year, depending on LTV, credit score, and loan type. On a $500,000 loan at 0.7% annually, that's about $292/month added to your payment.

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Related resources

Sources

1.Consumer Financial Protection Bureau (CFPB). What is private mortgage insurance (PMI)? — Accessed June 2026
2.U.S. Department of Housing and Urban Development (HUD). FHA Annual Mortgage Insurance Premium — Accessed June 2026
3.Federal Reserve Bank of St. Louis (FRED). 30-Year Fixed Rate Mortgage Average — Accessed June 2026

PMI and MIP cancellation rules vary by loan type and origination date. New appraisal requirements vary by lender. Not a commitment to lend.

Sunrise Lending · Equal Housing Opportunity. Matching rules are written and reviewed by licensed mortgage professionals. All loan decisions are made by licensed mortgage professionals. Not a commitment to lend. Loan approval subject to underwriting guidelines. This is not financial advice.